Unaudited Interim Consolidated Financial Statements for the first six months of the 2012 financial year

Transcription

1 AS TALLINK GRUPP Unaudited Interim Consolidated Financial Statements for the first six months of the 2012 financial year 1 January June 2012 Beginning of the financial year 1. January 2012 End of the financial year 31. December 2012 Commercial Registry No Address Sadama 5/ , Tallinn Estonia Telephone Fax Internet homepage Primary activity Auditor maritime transportation (passenger and cargo transportation) KPMG Baltics OÜ

2 CONTENT MANAGEMENT REPORT FOR THE INTERIM FINANCIAL STATEMENTS 3 Unaudited Interim Consolidated Financial Statements First six months of the financial year 2012 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 12 CONSOLIDATED STATEMENT OF FINANCIAL POSITION 13 CONSOLIDATED CASH FLOW STATEMENT 14 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 15 ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT Notes to the unaudited interim consolidated financial statements First six months of the financial year 2012 MANAGEMENT BOARD S APPROVAL TO THE INTERIM CONSOLIDATED 22 FINANCIAL STATEMENTS 2

3 Management Report II quarter of the financial year 2012 MANAGEMENT REPORT Steady growth despite the adverse weather, unstable economic environment and volatile fuel prices can be used to describe the second quarter (1 April 30 June) operations of AS Tallink Grupp and its subsidiaries (the Group). The Group carried total of 2.4 million passengers in the second quarter of 2012 which is nearly 2% more than in the same period of the last year. Market share improved overall. The Group s unaudited consolidated revenue for the second quarter of the 2012 financial year increased by EUR 6.8 million or 3% year on year to EUR million. In result of the increase in revenues and changes in the operations, including the earlier closure of the Finland Germany route, the Group s earnings improved. Also the earnings from the continuing operations increased. Total unaudited Gross profit for the second quarter amounted to EUR 57.3 million, up by 13.6% and EBITDA amounted to EUR 46.2 million up by 9.6% when compared to the same period in last year. In the second quarter of 2012 the Group s unaudited net profit was EUR 20 million compared to EUR 13.6 million last year. The total cumulative net profit for the six months of the 2012 financial year amounts to EUR 1 million compared to net loss of EUR 3.5 million a year ago. Considering the overall economic situation and competition the Group s second quarter results were generally pleasing, but did not fully meet the management expectations as the dynamics in the passenger metrics were different. While the revenue per passenger from shops and restaurant sales is showing a healthy 3.6% or 2 EUR growth per passenger at the same time revenue from ticket sales declined by 1.2 EUR or 4.4% when compared to the second quarter of the previous year. The unusually bad weather in spring and early summer affected the passengers booking behaviour hence resulting in increased promotional activities to attract people to travel. The fuel prices in the second quarter were volatile. When measured in euros and compared to the same quarter of the last year the average quarterly price for ship fuel was approximately 13% higher. In result the Group s fuel cost in the continuing operations increased by EUR 3.9 million. Due to the closure of Finland-Germany operations the total fuel cost for the Group in the second quarter was EUR 3.4 million smaller. Cash flow from operations amounted to EUR 51.1 million in the second quarter of EUR 34.3 million was used to repay the bank debt resulting the 3.6% decrease in interest bearing liabilities during the second quarter. The net debt in the end of the second quarter was EUR million and the net debt ratio to last 12-months EBITDA was 5.1. At the end of June the Group had EUR 51.8 million in cash and equivalents and the total of unused credit lines stood at EUR 66 million. The total liquidity, cash and unused credit facilities at the end of the second quarter was EUR million providing strong position for the sustainable operations. 3

4 Management Report II quarter of the financial year 2012 Q2 KEY FIGURES 2012 Continuing operations April-June 2011 April-June change Revenue from continuing operations EUR million % Gross profit from continuing operations EUR million % Net profit from continuing operations EUR million % Group total including the discontinued operations Revenue EUR million % Gross profit EUR million % Gross margin (%) 23.4% 21.2% EBITDA EUR million % EBITDA margin (%) 18.9% 17.7% Net profit for the period EUR million % Net profit margin (%) 8.2% 5.7% Depreciation and amortization EUR million % Investments EUR million % Weighted average number of ordinary shares outstanding Earnings per share EUR % Number of passengers % Number of cargo units % Average number of employees % Total assets EUR million % Interest-bearing liabilities EUR million % Net debt EUR million % Total equity EUR million % Equity ratio (%) 40.1% 38.9% Net debt to EBITDA Number of ordinary shares outstanding % Shareholders equity per share EUR % EBITDA: Earnings before net financial items, share of profit of equity accounted investees, taxes, depreciation and amortization; Earnings per share: net profit / weighted average number of shares outstanding; Equity ratio: total equity / total assets; Shareholder s equity per share: shareholder s equity / number of shares outstanding; Gross margin: gross profit / net sales; EBITDA margin: EBITDA / net sales; Net profit margin: net profit / net sales; Net debt: Interest bearing liabilities less cash and cash equivalents; Net debt to EBITDA: Net debt / 12-months trailing EBITDA. 1 Share numbers exclude own shares. 4

5 Management Report II quarter of the financial year 2012 SALES & SEGMENT RESULTS The following table provides an overview of the quarterly sales development by operational segments: Q2 Q3 Q4 Q1 Q2 Q2 change in EUR millions y-o-y Ticket sales % Restaurant & shop sales % Cargo sales % Accommodation sales % Leases of vessels % Other sales % 0.0% Total revenue % The following table provides an overview of the quarterly sales and result development by geographical segments: Q2 Q3 Q4 Q1 Q2 Q2 change y-o-y Finland- Passengers th % Estonia Cargo units th % Revenue mil.eur % Segment result mil.eur % Finland- Passengers th % Sweden Cargo units th % Revenue mil.eur % Segment result mil.eur % Sweden- Passengers th % Estonia Cargo units th % Revenue mil.eur % Segment result mil.eur % Sweden- Passengers th % Latvia Cargo units th % Revenue mil.eur % Segment result mil.eur % Finland- Passengers th % Germany Cargo units th % Revenue mil.eur % Segment result mil.eur % Other Revenue mil.eur % Segment result mil.eur % Inter segment sales milj.eur % Total revenue milj.eur % EBITDA milj.eur % Total segment result milj.eur % Net profit/-loss milj.eur % Segment result - result before administrative expenses, financial expenses and taxes 5

6 Management Report II quarter of the financial year 2012 The following graphs provide an overview of the sales distribution in the second quarter on operational and geographical segment based approach MARKET DEVELOPMENTS The following table provides an overview of the passengers, cargo units and passenger vehicles transported during the first half-year and second quarter of 2012 and 2011 financial years. Q2 Q2 Q2 I half-year I half-year I half-year Change Change Passengers % % Finland-Sweden % % Estonia-Finland % % Estonia-Sweden % % Latvia-Sweden % % Finland-Germany* % % Cargo Units % % Finland-Sweden % % Estonia-Finland % % Estonia-Sweden % % Latvia-Sweden % % Finland-Germany* % % Passenger Vehicles % % Finland-Sweden % % Estonia-Finland % % Estonia-Sweden % % Latvia-Sweden % % Finland-Germany* % % * Finland-Germany operations were discontinued in August Vessels M/S Superfast VII and M/S Superfast VIII were chartered out for at least three years. 6

7 Management Report II quarter of the financial year 2012 The Group s market shares on the routes operated during a 12 month period ending on the June 30, 2012 were as follows: The Group carried approximately 59% of the passengers and 50% of ro-ro cargo on the route between Tallinn and Helsinki; The Group is the only provider of daily passenger transportation between Estonia and Sweden; The Group is the only provider of daily passenger and ro-ro cargo transportation between Riga and Stockholm; The Group carried approximately 55% of passengers and 34% of ro-ro cargo on the routes between Finland and Sweden; PERSONNEL On June 30, 2012 the Group employed employees (7 516 on June 30, 2011).The following table provides a more detailed overview of the Group s personnel. Average of 2nd quarter Average of 1st half-year End of 2nd quarter change % change % change % Onshore total % % % Estonia % % % Finland % % % Sweden % % % Latvia % % % Germany % % % Russia % % % At sea % % % Hotel* % % % Total % % % * The number of hotel personnel is not included in the total number of ashore personnel. 7

8 Management Report II quarter of the financial year 2012 CORPORATE STRUCTURE On the report date, the Group consisted of 46 companies. All of the subsidiaries are wholly-owned companies of AS Tallink Grupp. The following chart describes the structure of the Group as on the date of reporting: AS Tallink Grupp Holding & Operating company Ship-owning companies Sales & Operations Service companies Baltic SF IX Ltd Superfast IX Baltic SF VIII Ltd Superfast VIII AS Tallink Baltic Finland-Germany route AS Tallink Latvija Sales & Marketing and crewing in Latvia AS Tallink Duty Free Supply of goods OÜ HT Hulgi Tolliladu Public customs warehouse Baltic SF VII Ltd Superfast VII Tallink Hansaway Ltd Star OOO Tallink-Ru Sales & Marketing in Russia AS Hansatee Cargo Dormant OÜ TLG Hotell Hotel operator SIA TLG Hotel Latvija Hotel operator Tallink Superfast Ltd Superstar Tallink Sea Line Ltd Galaxy AS Tallink Riga-Stockholm route Tallink Finland OY Dormant OÜ Hera Salongid Beauty services OÜ HT Laevateenindus Technical ship Management & crewing Tallink High Speed Line Ltd Baltic Queen Tallink Autoexpress Ltd Silja Serenade Silja Europa AS HTG Invest Stevedoring services SIA HT Shipmanagement Technical ship management in Latvia Hansalink Ltd Dormant Tallink Fast Ltd Baltic Princess HTG Stevedoring OY Stevedoring services OÜ Hansaliin Crewing Tallink Victory Line Ltd Victoria I Tallink Ltd Romantika OÜ Hansatee Kinnisvara Lease of vehicles OÜ HT Meelelahutus Entertainment on ships Tallinn Stockholm Line Ltd Regina Baltica Tallinn Swedish Line Ltd Silja Symphony Silja Festival Seawind OÜ Mare Pharmaci Dormant OÜ Tallink Travel Club Travel services Tallink Line Ltd Dormant Vana Tallinn Line Ltd Vana Tallinn Ingleby (1699) Ltd Process agent Tallinn-Helsinki Line Ltd Regal Star Kapella Shipping Ltd Kapella AS Tallink Scandinavian Holding company Tallink Silja Oy Sales & Marketing in Finland Finland-Sweden route operations Tallink Silja Ab Sales & Marketing in Sweden Sally Ab Sales agent in Åland Silja Line Gmbh Sales agent in Germany The Group further owns: 34% of AS Tallink Takso 8

9 Management Report II quarter of the financial year 2012 SHAREHOLDERS & SHARE PRICE DEVELOPMENT The following chart displays the shareholder structure of AS Tallink Grupp as of 30 June Since 9 th of December 2005 the shares of AS Tallink Grupp are listed on the Tallinn Stock Exchange, where the share are traded under the symbol TAL1T. The following chart gives an overview of the share price development in the past twelve months. Share price in EUR Daily turnover thousand EUR Source: Nasdaq OMX Baltic 9

10 Management Report II quarter of the financial year 2012 EVENTS IN Q2 Shareholders General Meeting was held on 7 June The meeting approved the Annual Report, profits were distributed to legal reserves and retained earnings, KPMG Baltics OÜ was nominated to conduct 2012 audit, Mr. Ashwin Roy was re-elected to the Supervisory Board and the remuneration of the Supervisory board was decided. EVENTS AFTER THE BALANCE SHEET DATE AND THE OUTLOOK An agreement with Reklon Holding Ltd was concluded in August 2012 to sell the motor vessel Kapella. For the sake of ease the sale is concluded by selling the shares of Kapella Shipping Ltd. of Bahamas, a subsidiary of AS Tallink Grupp that owns M/S Kapella. Kapella Shipping Limited s only activity has been the holding of MS Kapella. It is an insignificant subsidiary in the Group and the profit from the sale will not have any material effect on AS Tallink Grupp s consolidated financial results. The Group s earnings are not generated evenly throughout the year. Summer period is the high season in the Group s operations. In the opinion of the management and based on the experience of the previous financial years the majority of the earnings are generated during summer (June- August). AS Tallink Grupp does not have any substantial ongoing research and development projects. The Group s fleet renewal program has been completed and thus the Group s investment requirement is relatively small going ahead. This allows concentrating on the core operations. The management continues to target overall improvement in the Group results in the 2012 financial year. The turbulence in the euro zone and continuously high fuel prices add uncertainties to the operations. Throughout the 2012 a positive impact shall be expected from the closure of the Finland-Germany route which previous result will change to more positive result from chartering of ships. RISKS The Group s business, financial condition and results from operations could be materially affected by various risks. These risks are not the only ones. Additional risks and uncertainties not presently known to us, or that we currently believe are immaterial or unlikely, could also impair our business. The order of presentation of the risk factors below is not intended to be an indication of the probability of their occurrence or of their potential effect on our business. Accidents, disasters Macroeconomic development Changes in laws and regulations Relations with trade unions Increase in the fuel prices and interest rates Market and customer behaviour 10

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12 Unaudited Interim Consolidated Financial Statements first six months of the financial year 2012 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (unaudited, in thousands of EUR) Continuing operations Revenue (Note 3) 244, , , ,153 Cost of sales -187, , , ,001 Gross profit 57,254 54,280 76,068 75,152 Marketing expenses -16,861-15,183-32,633-30,054 Administrative expenses -12,165-10,385-22,894-20,247 Other income Other expenses Results from operating activities 28,566 28,901 21,015 25,374 Finance income (Note 4) 1, ,152 2,647 Finance costs (Note 4) -9,656-11,579-21,128-23,954 Profit/-loss before income tax 19,990 18,112 1,039 4,067 Income tax Net profit/-loss from continuing operations 19,990 18,112 1,039 4,067 Profit/-loss from discontinued operation (Note 3) 0-4, ,594 Net profit/-loss for the period 19,990 13,620 1,039-3,527 Other comprehensive income/-expense Exchange differences on translating foreign operations Other comprehensive income/-expense for the period Total comprehensive income/-expense for the period 19,928 13,777 1,034-3,404 Profit/-loss attributable to: Equity holders of the parent (Note 5) 19,990 13,620 1,039-3,527 Total comprehensive income/-expense attributable to: Equity holders of the parent 19,928 13,777 1,034-3,404 Earnings per share (in EUR per share) - basic (Note 5) diluted (Note 5)

13 Unaudited Interim Consolidated Financial Statements first six months of the financial year 2012 CONSOLIDATED STATEMENT OF FINANCIAL POSITION (unaudited, in thousands of EUR) ASSETS Current assets Cash and cash equivalents 51,828 75,421 Trade and other receivables 42,114 35,152 Prepayments 13,920 7,087 Inventories 28,059 25,198 Total current assets 135, ,858 Non-current assets Investments in associates Other financial assets 2,024 2,551 Deferred income tax assets 9,452 9,452 Investment property Property, plant and equipment (Note 7) 1,553,829 1,583,002 Intangible assets (Note 8) 58,936 61,153 Total non-current assets 1,624,767 1,656,684 TOTAL ASSETS 1,760,688 1,799,542 LIABILITIES AND EQUITY Current liabilities Interest bearing loans and borrowings (Note 9) 167, ,261 Trade and other payables 96,006 86,793 Deferred income 33,392 25,226 Derivatives (Note 6) 22,668 22,668 Total current liabilities 319, ,948 Non-current liabilities Interest bearing loans and borrowings (Note 9) 735, ,305 Other liabilities Total non-current liabilities 735, ,503 TOTAL LIABILITIES 1,054,563 1,094,451 EQUITY Equity attributable to equity holders of the parent Share capital 404, ,290 Share premium Reserves 72,366 70,497 Retained earnings 228, ,665 Total equity attributable to equity holders of the parent 706, ,091 TOTAL EQUITY 706, ,091 TOTAL LIABILITIES AND EQUITY 1,760,688 1,799,542 13

14 Unaudited Interim Consolidated Financial Statements first six months of the financial year 2012 CONSOLIDATED CASH FLOW STATEMENT (unaudited, in thousands of EUR) Cash flows from operating activities Net profit/-loss for the period 1,039-3,527 Adjustments 56,034 57,407 Changes in assets related to operating activities -16,122-24,512 Changes in liabilities related to operating activities 18,659 23,801 Income tax paid ,600 53,147 Cash flow used for investing activities Purchase of property, plant and equipment and intangible assets (Notes 7, 8) -3,687-4,533 Proceeds from disposals of property, plant and equipment Payments from settlement of derivatives -2,019-2,542 Interest received ,537-6,993 Cash flow from (+)/ used for (-) financing activities Redemption of loans (Note 9) -58,638-12,850 Repayment of finance lease liabilities (Note 9) Interest paid -18,976-18,822-77,656-31,713 TOTAL NET CASH FLOW -23,593 14,441 Cash and cash equivalents: - at the beginning of period 75,421 44,946 - increase (+) / decrease (-) -23,593 14,441 Cash and cash equivalents at end of period 51,828 59,387 14

15 Unaudited Interim Consolidated Financial Statements first six months of the financial year 2012 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (unaudited, in thousands of EUR) Share Share capital premium Translation reserve Ships revaluation reserve Mandatory legal reserve Reserve for treasury shares Share option programme reserve Retained earnings Shareholders equity At 31 December , ,811 10,869-4, , , ,749 Changes in equity for the I half-year of 2011 Transfer from profit for 2009/ , , Decrease of share capital -26, , Share-based payments transactions (Note 11) Total comprehensive income and expense for the period Net loss of the I half-year of the year 2011 (Note 5) ,527-3,527-3,527 Total other comprehensive income and expense Total comprehensive income and expense for the period ,527-3,404-3,404 At 30 June , ,811 11,962-4, , , ,872 Total equity At 31 December , ,710 11,962-4, , , ,091 Changes in equity for the I half-year of 2012 Transfer from profit for 2010/ , , Total comprehensive income and expense for the period Net profit of the I half-year of the year 2012 (Note 5) ,039 1,039 1,039 Total other comprehensive income and expense Total comprehensive income and expense for the period ,039 1,034 1,034 At 30 June , ,710 13,836-4, , , ,125 15

16 Notes to the unaudited interim consolidated financial statements first six months of the financial year 2012 NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS Note 1 CORPORATE INFORMATION The interim consolidated financial statements of AS Tallink Grupp and its subsidiaries (hereinafter as the Group ) for the first 6 months of the financial year 2012 were authorised for issue in accordance with a resolution of the Management Board on 15 August AS Tallink Grupp is a limited company incorporated in Estonia and employed 7,377 people at 30 June 2012 (31 December 2011: 6,610). Note 2 BASIS OF PREPARATION The interim consolidated financial statements of AS Tallink Grupp have been prepared in a condensed form in accordance with IFRS as adopted by EU and in accordance with the requirements of International Accounting Standard (IAS) 34 Interim Financial Reporting. The same accounting policies and methods of computation are followed in the interim consolidated financial statements as in the annual consolidated financial statements of AS Tallink Grupp for the financial year ended on 31 December The interim consolidated financial statements have been prepared in thousand euro (EUR). Note 3 SEGMENT INFORMATION The Group s operations are organised and managed separately according to the nature of the different markets. The routes represent different business segments. The following tables present the Group s revenue and profit information regarding reportable segments for the reportable and comparable period. 16

17 Notes to the unaudited interim consolidated financial statements first six months of the financial year 2012 Geographical segments (in thousands of EUR) Estonia- Estonia- Latvia- Germany- Finland- Others Elimination of Total Finland route Sweden routes Sweden route Finland route (Discontinued) Sweden routes intersegment sales Revenue Sales to external customers 143,634 52,813 29, ,493 43, ,611 Inter-segment sales ,587-3, ,634 52,813 29, ,493 46,795-3, ,611 Segment result 37,310 2,340-4, ,320 6, ,435 Unallocated expenses -22,420 Net financial items (Note 4) -19,976 Profit before income tax 1, Estonia- Estonia- Latvia- Germany- Finland- Others Elimination of Total Finland route Sweden routes Sweden route Finland route (Discontinued) Sweden routes intersegment sales Revenue Sales to external customers 128,934 49,732 28,520 8, ,812 31, ,148 Inter-segment sales ,844-3, ,934 49,732 28,520 8, ,812 34,999-3, ,148 Segment result 33,846 3,338-3,404-7,594 7,463 3, ,504 Unallocated expenses -19,724 Net financial items (Note 4) -21,307 Loss before income tax -3,527 17

18 Notes to the unaudited interim consolidated financial statements first six months of the financial year 2012 Revenue by services (in thousands of EUR) Ticket sales 106, ,647 Sales of cargo transport 52,860 53,140 Accommodation sales 7,101 6,595 Restaurant and shops sales on-board and on mainland 241, ,069 Income from leases of vessels 14,289 8,931 Other 16,605 15,766 Total revenue of the Group 438, ,148 Discontinued operation In August 2011 the Group ended traffic between Germany and Finland. (in thousands of EUR) Results of discontinued operation Revenue 0 8,995 Expenses 0-16,589 Results from operating activities 0-7,594 Results from operating activities, net of tax 0-7,594 Profit/-loss for the period 0-7,594 Basic earnings per share (EUR) Diluted earnings per share (EUR) Note 4 FINANCE INCOME AND COSTS (in thousands of EUR) Net foreign exchange gains 1,022 0 Income from derivatives 0 2,621 Interest income Total finance income 1,152 2,647 Net foreign exchange loss Interest expenses -19,109-20,638 Losses from derivatives -2,019-3,129 Total finance costs -21,128-23,954 Note 5 EARNINGS PER SHARE Basic earnings per share are calculated by dividing the net profit for the period attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period. As the company does not have any potential ordinary shares, then the diluted earnings per share are equal to basic earnings per share Weighted average number of ordinary shares (pcs) 669,882, ,882, ,882, ,882,040 Net profit/-loss attributable to ordinary shareholders 19,990 13,620 1,039-3,527 Earnings per share (in EUR per share)

19 Notes to the unaudited interim consolidated financial statements first six months of the financial year 2012 Weighted average number of ordinary shares (pcs) Issued ordinary shares at the beginning of period 673,817, ,817, ,817, ,817,040 Effect of own shares held -3,935,000-3,935,000-3,935,000-3,935,000 Weighted average number of ordinary shares at end of period 669,882, ,882, ,882, ,882,040 Note 6 DERIVATIVE INSTRUMENTS The Group uses interest rate swaps to manage its exposure to movements in interest rates. Where the effectiveness of the hedge relationship in a cash flow hedge is demonstrated, changes in the fair value are included in the hedging reserve in shareholders equity and released to match actual payments on the hedged item. Changes in fair value of derivatives which do not qualify for hedge accounting under IAS 39 are recognized directly in the income statement. As of AS Tallink Grupp had three interest rate derivative contracts with total notional amount of 270,000 thousand EUR with the maturities in years 2012, 2014 and The fair value of the interest rate derivatives recognized in the current interim financial statements as of is -22,668 thousand EUR. Note 7 PROPERTY, PLANT AND EQUIPMENT (in thousands of EUR) Land and building Ships Plant and equipment Prepayments Total Book value at 31 December ,174 1,570,057 8, ,583,002 Additions , ,559 Exchange rate differences Depreciation for the period ,032-1, ,074 Book value at 30 June ,700 1,539,759 10, ,553,829 At 30 June Cost 9,625 1,650,718 27, ,688,102 -Accumulated depreciation -5, ,959-17, ,273 Land and building Ships Plant and equipment Prepayments Total Book value at 31 December ,598 1,632,704 5, ,644,233 Additions ,155 1,502 4,346 Exchange rate differences Disposals Depreciation for the period ,306-1, ,326 Book value at 30 June ,914 1,601,978 6,664 1,644 1,615,200 At 30 June Cost 9,625 1,653,683 22,343 1,644 1,687,295 -Accumulated depreciation -4,711-51,705-15, ,095 19

20 Notes to the unaudited interim consolidated financial statements first six months of the financial year 2012 Note 8 INTANGIBLE ASSETS (in thousands of EUR) Goodwill Trademark Others Total Book value at 31 December ,066 42,250 7,837 61,153 Additions Amortisation for the period 0-1, ,345 Book value at 30 June ,066 40,792 7,078 58,936 At 30 June Cost 11,066 58,288 20,296 89,650 -Accumulated amortisation 0-17,496-13,218-30,714 Goodwill Trademark Others Total Book value at 31 December ,066 45,166 9,023 65,255 Additions Amortisation for the period 0-1, ,318 Book value at 30 June ,066 43,708 8,350 63,124 At 30 June Cost 11,066 58,288 19,947 89,301 -Accumulated amortisation 0-14,580-11,597-26,177 Note 9 INTEREST BEARING LOANS AND BORROWINGS (in thousands of EUR) 31 December 2011 Repayments Other changes [1] 30 June 2012 Lease liabilities Long-term bank loans 959,506-58,638 1, ,322 TOTAL 959,566-58,680 1, ,340 incl. short-term portion 145, ,328 long-term portion 814, ,012 [1] Other changes are related to amortisation of transaction costs. Bank overdrafts are secured with commercial pledge (in the total amount of 20,204 thousand EUR) and ship mortgages. AS Tallink Grupp has given guarantees to HSH Nordbank AG, Nordea Bank Plc, Skandinaviska Enskilda Banken AB, KfW IPEX Bank, Danske Bank A/S and HSBC Bank Plc. for the loans granted to overseas subsidiaries amounting to 739,309 thousand EUR. The primary securities for these loans are the pledge of shares of the overseas subsidiaries and mortgages on the ships belonging to the above-mentioned subsidiaries. AS Tallink Grupp has given guarantee to HSH Nordbank AB for the loan granted to Tallink Silja Oy Ab amounting to 163,013 thousand EUR. The primary securities for these loans are the pledge of shares of Tallink Silja Oy Ab and mortgages on the Silja ships. Note 10 SHARE CAPITAL According to the Articles of Association of the Parent effective as of 30 June 2012 the maximum number of authorised common shares is 2,133,333,333. At 30 June 2012 the Group held 3,935 thousand of the AS Tallink Grupp shares. Total cost of share buyback transactions of 3,935 thousand shares is 4,163 thousand EUR. Note 11 SHARE OPTION PROGRAMME In June 2011 the Group issued 7,317,500 share options of which 3,510,000 to the Management Board and Supervisory Board members and 3,807,500 to other Group employees. Each option gives right to purchase one share of AS Tallink 20

21 Notes to the unaudited interim consolidated financial statements first six months of the financial year 2012 Grupp. The share options were issued in accordance of the Share Option Programme which resolution was adopted at the Shareholders General Meeting on 08 February The options issued represent around 49% of the total authorized limit and 1.1% of the total shares outstanding. The terms and conditions of exercise of the issued share options are following: non-transferable; exercisable not earlier than 36 months from issue or 31 May 2014 and not later than 30 November 2014; exercise price EUR in case of new shares issued or average acquisition cost in case existing shares will be purchased from the market; options are to be settled by physical delivery of shares. At 30 June ,317,500 share options were valid and outstanding. Average remaining time to maturity of the outstanding share options is months. The fair value of the services received in return for share options granted is based on the fair value of share options granted, measured using the Black-Scholes model as of grant date. The Group used independent external advisor for the valuation share options who in addition to the share options terms and conditions used the following inputs for measurement: spot price of share EUR 0.72 as of 31 May 2011; expected volatility 30% based on historic analyse; option average time to maturity 42 months; the 3.4% and 8.1% annual dividend yields in 2012 and 2013 result in an effective dividend yield of 11.3% (based on the equity analysts consensus) and; risk-free interest rate 1.411%. In June 2011 the fair value of the received services in amount of 527 thousand EUR was recorded as an expense in the consolidated statement of comprehensive income and the fair value of share options in the same amount is held as a share option reserve in the equity. The outstanding share options have not diluting effect due to their exercise price being higher than the average price in the stock market during the period. Note 12 RELATED PARTY DISCLOSURES (in thousands of EUR) 6 months of 2012 Sales to Purchases from Amounts owed Amounts owed or related parties related parties by related parties to related parties AS Infortar AS HT Valuuta AS Vara HTG OÜ Mersok AS Vaba Maa OÜ Sunbeam 0 1, AS Gastrolink AS Tallink Takso OÜ Topspa Kinnisvara 0 1, OÜ Hansa Hotell OÜ Fastinvest SIA Happy Trails 1 1, Eesti Laevaomanike Liit SEB Tallink Tennis Team months of 2011 Sales to Purchases from Amounts owed Amounts owed or related parties related parties by related parties to related parties AS Infortar AS HT Valuuta AS Vara HTG OÜ Mersok AS Vaba Maa OÜ Sunbeam 0 1, AS Gastrolink AS Tallink Takso OÜ Topspa Kinnisvara 0 1, OÜ Hansa Hotell OÜ Fastinvest SIA Happy Trails 0 1, Eesti Laevaomanike Liit Note 13 EVENTS AFTER BALANCE SHEET DATE Subsidiary Kapella Shipping Limited was sold on 15 August

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